{"id":7013,"date":"2022-03-10T15:44:00","date_gmt":"2022-03-10T15:44:00","guid":{"rendered":"https:\/\/iqeq.com\/?p=7013"},"modified":"2023-08-16T15:23:22","modified_gmt":"2023-08-16T15:23:22","slug":"are-you-ready-meet-sfdr-annual-reporting-requirements","status":"publish","type":"post","link":"https:\/\/iqeq.com\/insights\/are-you-ready-meet-sfdr-annual-reporting-requirements\/","title":{"rendered":"Are you ready to meet SFDR annual reporting requirements?"},"content":{"rendered":"<section class=\"text-block standard-spacing  \">\n    <div class=\"container fade-in\">\n        <p class=\"introduction\"><strong>Today marks the one-year anniversary since the EU\u2019s Sustainable Finance Disclosure Regulation (<\/strong><a href=\"https:\/\/ec.europa.eu\/info\/business-economy-euro\/banking-and-finance\/sustainable-finance\/sustainability-related-disclosure-financial-services-sector_en\"><strong>SFDR<\/strong><\/a><strong>) came into force on 10 March 2021.<\/strong><\/p>\n<p>As a critical component of the EU\u2019s sustainability agenda, the intent of the regime is to increase transparency on sustainability between financial institutions, investors, and other market players.<\/p>\n<p>SFDR Level 1 requires financial institutions within the EU\u2014or those marketing to EU investors\u2014to make principles-based disclosures on ESG-related activity. Firms must report not only on the sectors they invest in, but also on their portfolio companies. Further, SFDR disclosures are not limited to marketing materials. They must be made public on financial institutions\u2019 websites alongside a sustainability risk policy.<\/p>\n<p><strong>Since March 2021, more detailed Level 2 requirements (known as \u2018SFDR RTS\u2019) have been formulated.\u00a0<\/strong>As of 1 January 2022, respective firms in scope must include detailed pre-contractual and annual reporting disclosures based on the EU\u2019s Regulatory Technical Standards (RTS). While the application date of the RTS has been pushed back to 1 January 2023, market participants must still make best-effort disclosures in their 2022 annual reporting.<\/p>\n<p>Put simply, in scope firms marketing to EU investors had to make sustainability promises last year in order to comply. This year, those notes are coming due. Firms must make periodic and ongoing disclosures on how they\u2019ve performed against those promises.<\/p>\n<p>The RTS is\u00a0<a href=\"https:\/\/www.esma.europa.eu\/sites\/default\/files\/library\/jc_2021_50_-_final_report_on_taxonomy-related_product_disclosure_rts.pdf\">still in draft form<\/a>\u00a0and won\u2019t formally come into effect until 1 January 2023. In the meantime, the draft RTS is a helpful guideline toward this year\u2019s best-effort disclosures.<\/p>\n<h4>Unsure where to begin with the new disclosure requirements? You\u2019re not alone.<\/h4>\n<p>Even with the draft RTS as a guide, firms are encountering roadblocks\u2014particularly because portfolio companies must also participate. It\u2019s exceptionally difficult to report on your goals when portfolio companies don\u2019t have the required information readily available.<\/p>\n<p>If you aren\u2019t already in the process of collecting that data, it will be even more difficult now that 2021 has come to a close. Most firms have just a few short months to collate data and write updates for their annual reporting.<\/p>\n<p><strong>In an unprecedented era of public scrutiny, keeping abreast of SFDR requirements is more important than ever.\u00a0<\/strong>If you\u2019re unclear if this applies to you, behind schedule, stuck or unsure how to proceed, now is the time to consult an expert. Teams of experienced professionals (like ours at IQ-EQ) can help draft and even collect disclosure data, saving you countless hours of strain.<\/p>\n<h4>Speak to IQ-EQ<\/h4>\n<p><a href=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/04\/SFDR-Factsheet.pdf\">Download our SFDR Factsheet<\/a> for an overview of the SFDR services offered by IQ-EQ. To discuss your requirements and find out more about how IQ-EQ could help, please get in touch using my contact details below.<\/p>\n            <\/div>\n<\/section>\n\n<section class=\"related-section related-section--people related-section--centered standard-spacing\">\n    <div class=\"container\">\n                    <h2>Meet the author<\/h2>\n                <div class=\"cards row-load\">\n            <div class=\"person-card\">\n            <div class=\"bg-img lozad normal\">\n            <img width=\"290\" height=\"192\" class=\"attachment-person_card size-person_card lozad\" alt=\"\" data-src=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/04\/Sarmad-Naim-Grey-BG_0-290x192.jpg\" \/>        <\/div>\n        <div class=\"bg-img lozad hover\">\n            <img width=\"290\" height=\"192\" class=\"attachment-person_card size-person_card lozad\" alt=\"\" data-src=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/04\/Sarmad-Naim-Green-BG-290x192.jpg\" \/>        <\/div>\n        <div class=\"info\">\n                    <h3>Sarmad Naim<\/h3>\n                <p class=\"job-title\">Principal Consultant, UK<\/p>\n        <div class=\"border\"><\/div>\n                    <p class=\"location\">United Kingdom<\/p>\n                <a href=\"#contact-person\" class=\"link link--deepgray email\">\n            Send email        <\/a>\n                    <a href=\"tel:+442073975480\" class=\"link telephone\">\n                +44 20 7397 5480            <\/a>\n                                    <div class=\"socials\">\n                <a href=\"https:\/\/www.linkedin.com\/in\/sarmad-naim-4371132a\/\" class=\"linkedin\">\n                    <span class=\"screen-reader-text\">LinkedIn<\/span>\n                <\/a>\n            <\/div>\n            <\/div>\n<\/div>        <\/div>\n        <div class=\"button-wrapper\">\n                    <\/div>\n    <\/div>\n<\/section>","protected":false},"excerpt":{"rendered":"","protected":false},"author":7,"featured_media":7020,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[1],"tags":[],"expertise":[444,17],"service_category":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Are you ready to meet SFDR annual reporting requirements? 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